NEW YORK — New signs of economic recovery emerged Tuesday only to be overshadowed by new worries that they won’t last.
The U.S. manufacturing sector grew in August for the first time in 19 months. A gauge of future home sales surged in July to its highest point in more than two years. And auto sales — boosted by the Cash for Clunkers program — appeared in August to have marked their first year-over-year monthly gain since October 2007.
Yet hopes for a sustained recovery remain clouded by a big concern: consumer spending, which fuels about 70 percent of U.S. economic activity.
Americans are hamstrung by flat wages and job losses and aren’t borrowing and spending enough to nourish a lasting rebound. That raises the vexing question of who will buy all the goods that manufacturers are producing?
Skepticism about a recovery contributed to a nasty tumble on Wall Street Tuesday, following a monthslong rally. All the major averages fell about 2 percent, with the Dow Jones industrials sliding 185 points, as concerns grew about the fragility of the banking industry and the global economy.
Stock market analysts noted that the manufacturing and housing gains were boosted by temporary government stimulus steps, including the Cash for Clunkers program, which has since expired.
“People reviewed the numbers and said this type of demand is just not sustainable,” said Tom di Galoma, head of U.S. rates trading at Guggenheim Capital Markets LLC.
At the same time, the National Association …
Read the original article at Oregonlive
Related Posts
Tags: Business, buy, Capital, cash, consumer, Economy, finance, Job, markets, stock, Wall Street
